Execution
Copy


 


NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


Original
Issue Date: November 13, 2018


 





$127,777.78


 


10%
original issue discount


5%
Senior Convertible NOTE





DUE
July 13, 2019


 


THIS
10% SENIOR CONVERTIBLE NOTE is one of a series of duly authorized and validly issued 5% Senior Convertible Notes issued at a 10%
original issue discount by OncBioMune Pharmaceuticals, Inc., a Nevada corporation (the “Company”) (this note, the
“Note” and, collectively with the other notes of such series, the “Notes”).


 





FOR VALUE RECEIVED, the
Company promises to pay to Cavalry Fund I LP, or its registered assigns (the “Holder”), or shall have paid pursuant
to the terms hereunder, the principal sum of $127,777.78 on the date that is the eight-month anniversary of the Original
Issue Date, or July 13, 2019 (the “Maturity Date”) or such earlier date as this Note is required or permitted
to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal
amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:


 


Section
1. Definitions. For the purposes hereof, (a) capitalized terms not otherwise defined herein shall have the meanings
set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:


 


“Alternate
Consideration” shall have the meaning set forth in Section 5(e).


 


“Amortization
Payment” shall have the meaning set forth in Section 2(b).


 


“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule
1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company
or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such
case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary thereof
is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d)
the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant
Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof
calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company
or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence
in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.


 


“Base
Conversion Price” shall have the meaning set forth in Section 5(b).


 


“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).


 




    	 		 



    	 



    

 


“Black
Scholes Value” means the value of the outstanding principal amount of this Note, plus all accrued and unpaid interest hereon
based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement
of the applicable Fundamental Transaction and the Maturity Date, (B) an expected volatility equal to the greater of 100% and the
100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement
of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the
price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental
Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental
Transaction and the Maturity Date.


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any
day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.


 


“Buy-In”
shall have the meaning set forth in Section 4(c)(v).


 


“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by
an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of
in excess of 50% of the voting securities of the Company (other than by means of conversion, exercise or exchange of the Notes
or the Securities issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person
merges into or consolidates with the Company and, after giving effect to such transaction, the shareholders of the Company immediately
prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction,
(c) the Company sells or transfers all or substantially all of its assets to another Person and the shareholders of the Company
immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after
the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the Board
of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original
Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board
of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), (e) either
of the individuals who are the Chief Executive Officer and Chief Financial Officer on the Original Issue Date cease to hold such
office; or (e) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing
for any of the events set forth in clauses (a) through (d) above.


 




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“Collateral
Agent” means the party appointed agent on behalf of all Purchasers in the Security Agreement dated November 13, 2018 by
and between the Company and the Collateral Agent.


 


“Conversion”
shall have the meaning ascribed to such term in Section 4.


 


“Conversion
Date” shall have the meaning set forth in Section 4(a).


 


“Conversion
Price” shall have the meaning set forth in Section 4(b).


 


“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms
hereof.


 


“Default
Conversion Price” shall have the meaning set forth in Section 4(b).


 


“Default
Interest Rate” shall have the meaning set forth in Section 2(a).


 


“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).


 


“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).


 


“DWAC”
means the Deposit or Withdrawal at Custodian system at The Depository Trust Company.


 


“Event
of Default” shall have the meaning set forth in Section 7(a).


 


“Exempt
Issuance” shall have the meaning set forth in the Purchase Agreement.


 


“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).


 


“Indebtedness”
shall have the meaning set forth in the Purchase Agreement.


 


“Late
Fees” shall have the meaning set forth in Section 2(c).


 


“Liens”
shall have the meaning set forth in the Purchase Agreement.


 


“Mandatory
Default Amount” means the sum of (a) (i) 140% of the outstanding principal amount of this Note (except in the case of an
Event of Default resulting from either (i) the failure to timely file SEC reports or to be in compliance with the current public
informational requirements under Rule 144(c) for a period of in excess of 5 Business Days , (ii) the incurrence of indebtedness
in violation of the terms hereof, or (iii) or the Company entering into any equity line of credit or similar agreement, issuing
or agreeing to issue any common stock, floating or variable priced equity linked instruments or any of the foregoing or equity
with price reset rights (subject to adjustment for stock splits, distributions, dividends, recapitalizations and the like)), in
each of which cases the percentage set forth in this subsection shall be 140%) plus (ii) accrued and unpaid interest hereon, including
Default Interest, and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Note.


 




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“New
York Courts” shall have the meaning set forth in Section 8(e).


 


“Note
Register” shall have the meaning set forth in Section 3(c).


 


“Notice
of Conversion” shall have the meaning set forth in Section 4(a).


 


“Option
Value” means the value of a Common Stock Equivalent based on the Black Scholes Option Pricing model obtained from the “OV”
function on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable
Common Stock Equivalent, if the issuance of such Common Stock Equivalent is publicly announced or (B) the Trading Day immediately
following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock Equivalent is not publicly
announced, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of the applicable Common Stock Equivalent as of the applicable date of determination, (ii) an expected
volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of (A) the Trading
Day immediately following the public announcement of the applicable Common Stock Equivalent if the issuance of such Common Stock
Equivalent is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Common Stock Equivalent
if the issuance of such Common Stock Equivalent is not publicly announced, (iii) the underlying price per share used in such calculation
shall be the highest VWAP of the Common Stock during the period beginning on the Trading Day prior to the execution of definitive
documentation relating to the issuance of the applicable Common Stock Equivalent and ending on (A) the Trading Day immediately
following the public announcement of such issuance, if the issuance of such Common Stock Equivalent is publicly announced or (B)
the Trading Day immediately following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock
Equivalent is not publicly announced, (iv) a zero cost of borrow and (v) a 360 day annualization factor.


 


“Original
Issue Date” means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless of
the number of instruments which may be issued to evidence such Notes.


 


“Payment
Date” shall have the meaning set forth in Section 2(b).


 


“Permitted
Indebtedness” means (a) the indebtedness evidenced by the Notes, (b) capital lease obligations and purchase money indebtedness
incurred in connection with the acquisition of machinery and equipment as long as such capital leases and indebtedness are approved
in advance by the Collateral Agent and (c) any indebtedness set forth on Schedule 3.1(aa) to the Purchase Agreement.


 


“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company)
have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s
business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business
of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien,
(c) Liens incurred in connection with Permitted Indebtedness under clauses (a) and (b) thereunder, and Liens set forth on Schedule
3.1(aa) to the Purchase Agreement.


 




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“Purchase
Agreement” means the Securities Purchase Agreement, dated as of November 13, 2018 among the Company and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).


 


“Successor
Entity” shall have the meaning set forth in Section 5(e).


 


“Trading
Day” means a day on which the principal Trading Market is open for trading.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange, or any market of the OTC Markets, Inc. (or any successors to any of the foregoing).


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on the OTCQB or OTCQX and if prices for the Common Stock are
then reported by the OTC Pink marketplace published by OTC Markets, Inc. (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases,
the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders
of a majority in interest of the Notes then outstanding and reasonably acceptable to the Company, the fees and expenses of which
shall be paid by the Company.


 


Section
2. Interest; Amortization Payments.


 


(a)
Interest. Interest shall accrue to the Holder on the aggregate unconverted and then outstanding principal amount of this
Note at the rate of five percent (5%) per annum, calculated on the basis of a 360-day year and shall accrue daily commencing on
the Original Issue Date until payment in full of the outstanding principal (or conversion to the extent applicable), together
with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. During
the existence of an Event of Default, interest shall accrue at the lesser of (i) the rate of 18% per annum, or (ii) the maximum
amount permitted by law (the lesser of clause (i) or (ii), the “Default Interest Rate”).


 




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(b)
Amortization Payments. The Company shall make three payments (each an “Amortization Payment”) as follows: on
the six-month anniversary of the Original Issue Date, on the seven-month anniversary of the Original Issue Date, and on the Maturity
Date (each such date a “Payment Date”), provided that if any Payment Date is not a Business Day, then the applicable
payment shall be due on the next succeeding Business Day. Each Amortization Payment shall be equal to one-third of the original
principal amount of the Note, plus all accrued interest thereon as of the Payment Date, as adjusted pursuant to Section 2(c) below.
At the Holder’s option (except as set forth herein), payment may be made in cash or in duly authorized, validly issued,
fully paid and non-assessable shares of Common Stock, provided the Company complies with the Equity Conditions provided in Section
2(d), below.


 


(c)
Payment in Cash. All payments shall be made in cash on any Payment Date, unless paid in Common Stock under Section 2(d).
If the six-month Amortization Payment shall be paid in cash, the Company shall pay the Holder an amount equal to 110% of the otherwise
applicable Amortization Payment amount. If either the seven-month or Maturity Date Amortization Payment shall be paid in cash,
the Company shall pay the Holder an amount equal to 115% of the otherwise applicable Amortization Payment amount.


 


(d)
Payment in Kind.


 


(1)
Election to be paid in Common Stock. The Holder may elect at its option to receive the Amortization Payments in Common
Stock.


 


(2)
DWAC Delivery. The shares of Common Stock shall be promptly delivered by DWAC upon conversion.


 


(3)
Valuation. If the Holder elects to receive shares of Common Stock delivered in payment of Amortization Payments, they shall
be valued at the lower of the Conversion Price or 60% of the lowest closing price of the Common Stock as reported on the OTCQB
or other principal Trading Market on which the Company’s shares are traded for the ten (10) prior Trading Days prior to
the applicable Payment Date.


 


(e)
Prepayment. The Notes may be prepaid at any time until the 180th day following the Original Issue Date at an amount equal
to (i) 115% of outstanding principal balance of the Note and accrued and unpaid interest during the period from the Original Issue
Date through the five months following the Original Issue Date, and (ii) 120% of outstanding principal balance of the Notes and
accrued and unpaid interest during month six following the Original Issue Date. In order to prepay the Notes, the Company shall
provide 20 Trading Days prior written notice to the Holder, during which time the Holder may convert the Notes in whole or in
part at the Conversion Price. Payments under Section 2(c) shall not be deemed a prepayment for purposes of this Section 2(e).


 


Section
3. Registration of Transfers and Exchanges.


 


(a)
Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized
denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer
or exchange.


 


(b)
Investor Representations. This Note has been issued subject to certain investment representations of the original Holder
set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable
federal and state securities laws and regulations.


 


(c)
Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent
of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the
Company nor any such agent shall be affected by notice to the contrary.


 




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Section
4. Conversion.


 


(a)
Voluntary Conversion. After the Original Issue Date until this Note is no longer outstanding, and provided that that the
provisions of Rule 144 under the Securities Act so permit, this Note shall be convertible, in whole or in part, at any time, and
from time to time, into shares of Common Stock at the option of the Holder. The Holder shall effect conversions by delivering
to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”),
specifying therein the principal amount of this Note to be converted and the date on which such conversion shall be effected (such
date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall
be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required,
nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To
effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire
principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall
have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The
Holder and the Company shall maintain records showing the principal amount(s) converted in each conversion, the date of each conversion,
and the Conversion Price in effect at the time of each conversion. The Company may deliver an objection to any Notice of Conversion
within one Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the
Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance
of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of
this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.


 


(b)
Conversion Price. The “Conversion Price” in effect on any Conversion Date means, as of any Conversion Date
or other date of determination, two cents ($0.02) per share (subject to adjustment as provided herein), provided, however,
that if an Event of Default has occurred, regardless of whether such Event of Default has been cured or remains ongoing, the Note
shall be convertible at 60% of the lowest closing price during the prior twenty (20) Trading Days of the Common Stock as reported
on the Trading Market (the “Default Conversion Price”).


 


(c)
Mechanics of Conversion or Prepayment.


 


(i)
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion
hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted
by (y) the Conversion Price in effect at the time of such conversion.


 


(ii)
Delivery of Certificate Upon Conversion. Not later than two (2) Trading Days after each Conversion Date (the “Share
Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder any certificate or certificates required
to be delivered by the Company under this Section 4(c) which, on or after the six month anniversary of the Original Issue Date,
shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement)
and such shares shall be delivered electronically through the Depository Trust Company or another established clearing corporation
performing similar functions.


 




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(iii)
Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not
delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written
notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in
which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly
return to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice.


 


(iv)
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares
upon conversion of this Note in accordance with the terms hereof, are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation
of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that
such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the
event the Holder of this Note shall elect to convert any or all of the outstanding principal amount hereof, the Company may not
refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any
violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or
enjoining conversion or prepayment of all or part of this Note shall have been sought and obtained, and the Company posts a surety
bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to
the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and
the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the
Company shall issue Conversion Shares upon a properly noticed conversion. If the Company fails for any reason to deliver to the
Holder such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the
Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $10 per Trading
Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after such Conversion Date) for each Trading
Day after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. In no event shall
liquidated damages for any one conversion exceed $1,000.00 for the first ten Trading Days. Nothing herein shall limit a Holder’s
right to pursue actual damages or declare an Event of Default pursuant to Section 7 hereof for the Company’s failure to
deliver Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof
or under applicable law.


 




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(v)
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available
to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery
Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase
(in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the
conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder
(in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s
total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the
aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by
(2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage
commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the
principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder
the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements
under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares
(including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately
preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to
the terms hereof.


 


(vi)
Reservation of Shares Issuable Upon Conversion. Subject to the Company’s shareholders approving an amendment to the
Company’s Articles of Incorporation to increase the number of shares of the Company’s Common Stock that the Company
is authorized to issue and filing of this amendment with the Secretary of State of the State of Nevada, the Company covenants
that it will reserve and keep available out of its authorized and unissued shares of Common Stock for the purpose of issuances
upon conversion of this Note (and other purposes further detailed in the Purchase Agreement), free from preemptive rights or any
other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than the
amount of shares designated in Section 4.9 of the Purchase Agreement. The Company covenants that all shares of Common Stock that
shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.


 


(vii)
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of
this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company
shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Conversion Price or round up to the next whole share.


 


(viii)
Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall
be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the
Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the
Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing corporation
performing similar functions) required for same-day electronic delivery of the Conversion Shares.


 




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(d)
Holder’s Conversion Limitations. The Company shall not effect any conversion of this Note, and a Holder shall not
have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the
applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together
with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder
and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which
such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion
of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its Affiliates and (ii)
exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation
on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Notes or the
Warrants) beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes
of this Section 4(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(d) applies, the determination
of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of
which principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice
of Conversion shall be deemed to be the Holder’s determination of whether this Note may be converted (in relation to other
securities owned by the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case
subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent
to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set
forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition,
a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(d), in determining the number of outstanding
shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of
the following: (i) the Company’s most recent periodic or annual report filed with the SEC, as the case may be, (ii) a more
recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Company’s transfer
agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company
shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.
In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise
of securities of the Company, including this Note, by the Holder or its Affiliates since the date as of which such number of outstanding
shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 2.49% of the number of shares
of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion
of this Note held by the Holder. The Holder, upon not less than 61 days’ prior notice to the Company, may increase the Beneficial
Ownership Limitation provisions of this Section 4(d) solely with respect to the Holder’s Note, provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock upon conversion of this Note held by the Holder and the provisions of this Section 4(d)
shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is delivered
to the Company. The Holder may also decrease the Beneficial Ownership Limitation provisions of this Section 4(d) solely with respect
to the Holder’s Note at any time, which decrease shall be effectively immediately upon delivery of notice to the Company.
The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than
in strict conformity with the terms of this Section 4(d) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary
or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor
holder of this Note.


 




    	 	10	 



    	 



    

 


Section
5. Certain Adjustments.


 


(a)
Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock
Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion
of, or payment of interest on, the Notes or pursuant to any of the other Transaction Documents), (ii) subdivides outstanding shares
of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares
of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock,
any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such
event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any
adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of shareholders
entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case
of a subdivision, combination or re-classification.


 


(b)
Subsequent Equity Sales. If, at any time, for so long as the Note or any amounts accrued and payable thereunder remain
outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right
to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition),
any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per
share that is lower than the Conversion Price then in effect (such lower price, the “Base Conversion Price” and each
such issuance or announcement a “Dilutive Issuance”), then the Conversion Price shall be immediately reduced to equal
the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.


If
the price per share for which shares of Common Stock are sold, or may be issuable pursuant to any such Common Stock Equivalent,
is less than the Conversion Price then in effect, or if, after any such issuance of Common Stock Equivalents, the price per share
for which shares of Common Stock may be issuable thereafter is amended or adjusted, and such price as so amended shall be less
than the Conversion Price in effect at the time of such amendment or adjustment, then the Conversion Price shall be adjusted upon
each such issuance or amendment as provided in this Section 5(b). In case any Common Stock Equivalent is issued in connection
with the issue or sale of other securities of the Company, together comprising one integrated transaction, (x) the Common Stock
Equivalents will be deemed to have been issued for the Option Value of such Common Stock Equivalents and (y) the other securities
issued or sold in such integrated transaction shall be deemed to have been issued or sold for the difference of (I) the aggregate
consideration received by the Company less any consideration paid or payable by the Company pursuant to the terms of such other
securities of the Company, less (II) the Option Value. If any shares of Common Stock or Common Stock Equivalents are issued or
sold or deemed to have been issued or sold for cash, the amount of such consideration received by the Company will be deemed to
be the net amount received by the Company therefor. If any shares of Common Stock or Common Stock Equivalents are issued or sold
for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration,
except where such consideration consists of publicly traded securities, in which case the amount of consideration received by
the Company will be the VWAP of such public traded securities on the date of receipt. If any shares of Common Stock or Common
Stock Equivalents are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the
surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and
business of the non-surviving entity as is attributable to such shares of Common Stock or Common Stock Equivalents, as the case
may be.


 




    	 	11	 



    	 



    

 


If
the holder of Common Stock or Common Stock Equivalents outstanding on the Original Issue Date or issued thereafter shall at any
time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or
otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive
shares of Common Stock at an effective price per share that is lower than the Conversion Price then in effect, such issuance shall
be deemed to have occurred for less than the Conversion Price on such date and such issuance shall be deemed to be a Dilutive
Issuance.


 


If
the Company enters into a Variable Rate Transaction despite the prohibition set forth in the Purchase Agreement, the Company shall
be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such securities
may be converted or exercised under the terms of such Variable Rate Transaction.


 


The
Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common
Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange
price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification,
whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive
Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the
date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice
of Conversion.


 


The
provisions of this Section 5(b) shall apply each time a Dilutive Issuance occurs after the Original Issue Date for so long as
the Note or any amounts accrued and payable thereunder remain outstanding, but any adjustment of the Conversion Price pursuant
to this Section 5(b) shall be downward only. Notwithstanding the foregoing, no adjustment will be made under this Section 5(b)
in respect of an Exempt Issuance.


 


(c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company
grants, issues or sells any Common Stock, Common Stock Equivalents or rights to purchase stock, warrants, securities or other
property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note
(without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).


 




    	 	12	 



    	 



    

 


(d)
Pro Rata Distributions. During such time as this Note is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets or rights or warrants to acquire its assets, or subscribe for or purchase any security other
than Common Stock, to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation,
any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance
of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that
the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete
conversion of this Note (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership
Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution
(provided, however, to the extent that the Holder’s right to participate in any such Distribution would result
in the Holder exceeding the Beneficial Ownership Limitation with respect to the Company or any other publicly-traded corporation
subject to Section 13(d) of the Exchange Act, then the Holder shall not be entitled to participate in such Distribution to such
extent (or in the beneficial ownership of any shares of common stock as a result of such Distribution to such extent) and the
portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto
would not result in the Holder exceeding the Beneficial Ownership Limitation with respect to the Company or any other publicly-traded
corporation subject to Section 13(d) of the Exchange Act).


 






    	 	13	 



    	 



    

 


(e)
Fundamental Transaction. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one
or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one
or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion
of this Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation on the conversion of this
Note), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental
Transaction by a holder of the number of shares of Common Stock for which this Note is convertible immediately prior to such Fundamental
Transaction (without regard to any limitation on the conversion of this Note). For purposes of any such conversion, the determination
of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion
the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any conversion of this Note following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of
a Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3
under the Exchange Act, or (3) a Fundamental Transaction involving a person or entity not traded on a national securities exchange
or trading market (with such exchange or market including, without limitation, the Nasdaq Global Select Trading Market, the Nasdaq
Global Market, or the Nasdaq Capital Market, The New York Stock Exchange, Inc., the NYSE MKT or the OTCQB), the Company or any
Successor Entity (as defined below) shall, at the Holder’s option, exercisable concurrently with the consummation of the
Fundamental Transaction, purchase this Note from the Holder by paying to the Holder the higher of (i) an amount of cash equal
to the Black Scholes Value of the outstanding principal of this Note on the date of the consummation of such Fundamental Transaction,
or (ii) the product of (a) the number of Conversion Shares issuable upon full conversion of this Note (without regard to any limitation
on conversion of this Note) and (b) the positive difference between the cash per share paid in such Fundamental Transaction minus
the then in effect Conversion Price. The Company shall cause any successor entity in a Fundamental Transaction in which the Company
is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this
Note and the other Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section
5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without
unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver to the
Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in
form and substance to this Note which is convertible for a corresponding number of shares of capital stock of such Successor Entity
(or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Note (without
regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion price which
applies the Conversion Price hereunder to such shares of capital stock (but taking into account the relative value of the shares
of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares
of capital stock and such conversion price being for the purpose of protecting the economic value of this Note immediately prior
to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder.
Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that
from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring
to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company
and shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect
as if such Successor Entity had been named as the Company herein. Notwithstanding anything in this Section 5(d), an Exempt Issuance
(as defined in the Purchase Agreement) shall not be deemed a Fundamental Transaction.








 


(f)
Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued
and outstanding.


 


(g)
Notice to the Holder.


 


(i)
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5,
the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.


 




    	 	14	 



    	 



    

 


(ii)
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall
be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a
party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby
the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed
at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder
at its last address as it shall appear upon the Note Register, at least 20 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date
as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect
the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries (as determined in
good faith by the Company), the Company or its successor shall simultaneously file such notice with the SEC pursuant to a Current
Report on Form 8-K. If the Company does not simultaneously file the required Form 8-K, the Holder shall be entitled penalties
in accordance with Section 4.6 of the Purchase Agreement. The Holder shall remain entitled to convert this Note during the 20-day
period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise
be expressly set forth herein.


 


Section
6. Negative Covenants. As long as any portion of this Note remains outstanding, unless the holders of at least 75%
in principal amount of the then outstanding Notes shall have otherwise given prior written consent, the Company shall not, and
shall not permit any of the Subsidiaries to, directly or indirectly:


 


(a)
other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed
money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom;


 


(b)
other than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to
any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;


 


(c)
amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder (provided, however, the consent of the Holders shall not be required in connection
with the first clause of the first sentence of Section 4(c)(vi) above), provided the Company may amend its Articles of Incorporation
to increase the number of authorized shares of its common stock or effect a reverse split of its Common Stock;


 


(d)
other than with respect to Permitted Indebtedness and the consummation of the transactions contemplated by the Redemption Agreement,
repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common
Stock or Common Stock Equivalents other than as to the Conversion Shares or Warrant Shares as permitted or required under the
Transaction Documents;


 




    	 	15	 



    	 



    

 


(e)
other than with respect to Permitted Indebtedness and the consummation of the transactions contemplated by the Redemption Agreement
repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness, other than the Notes if on a pro-rata basis,
other than regularly scheduled principal and interest payments as such terms are in effect as of the Original Issue Date, provided
that such payments shall not be permitted if, at such time, or after giving effect to such payment, any Event of Default exist
or occur;


 


(f)
pay cash dividends or distributions on any equity securities of the Company;


 


(g)
enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with
the SEC assuming that the Company is subject to the Securities Act or the Exchange Act, unless such transaction is made on an
arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than
a quorum otherwise required for board approval);


 


(h)
issue any equity securities of the Company other than pursuant to the provisions of the Purchase Agreement or an Exempt Issuance;
or


 


(i)
enter into any agreement with respect to any of the foregoing.


 


Section
7. Events of Default.


 


(a)
“Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event
and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or
order of any court, or any order, rule or regulation of any administrative or governmental body):


 


(i)
any default in the payment of (A) the principal amount of any Note or (B) interest, late fees, liquidated damages and other amounts
owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date, Payment Date or
the Maturity Date, or by acceleration or otherwise) which default, solely in the case of an interest payment or other default
under clause (B) above, is not cured within five Trading Days;


 


(ii)
the Company shall fail to observe or perform any other covenant or agreement contained in the Notes (other than a breach by the
Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause
(xi) below) or any Transaction Document which failure is not cured, if possible to cure, within the earlier to occur of (A) seven
Trading Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) 10 Trading Days after
the Company has become aware of such failure;


 


(iii)
a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which
the Company or any Subsidiary is obligated (and not covered by any other clause of this Section 7) which default (but not event
of default) if not cured, if possible to cure, within the earlier to occur of (i) seven Trading Days after notice of such default
sent by Holder or by any other holder to the Company and (ii) 10 Trading Days after the Company has become aware of such default;


 




    	 	16	 



    	 



    

 


(iv)
any representation or warranty made in this Note, any other Transaction Document, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made;


 


(v)
the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;


 


(vi)
the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured
or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves
an obligation greater than $25,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such
indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable and
such default is not cured within the earlier to occur of (i) seven Trading Days after notice of such default sent by Holder or
by any other holder to the Company and (ii) 10 Trading Days after the Company has become aware of such default;


 


(vii)
the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within 10 Trading Days;


 


(viii)
the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market for a period longer than 10 Trading
Days. Except for an Exempt Issuance, the Company shall be a party to any Change of Control Transaction or shall agree to sell
or dispose of all or in excess of 50% of its assets in one transaction or a series of related transactions (whether or not such
sale would constitute a Change of Control Transaction);


 


(ix)
from and after the Original Issue Date, the Company fails to have authorized and reserved the amount of shares designated in Section
4.9 of the Purchase Agreement (without regard to any limitations on conversion hereof, including without limitation, the Beneficial
Ownership Limitation) and shall not have cured such failure within 10 Trading Days of such failure;


 


(x)
the Company shall fail for any reason, except if caused by the action or inaction of the Holder to deliver certificates to a Holder
prior to the second Trading Day after a Conversion Date pursuant to Section 4(c) or the Company shall provide at any time notice
to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for conversions
of any Notes in accordance with the terms hereof; or


 


(xi)
any monetary judgment, writ or similar final process shall be entered or filed against the Company, any Subsidiary or any of their
respective property or other assets for more than $25,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 10 calendar days.


 


(b)
Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus accrued
but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become,
at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Upon the payment in full
of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection
with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand,
protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and
all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be
rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the
Note until such time, if any, as the Holder receives full payment pursuant to this Section 7(b). No such rescission or annulment
shall affect any subsequent Event of Default or impair any right consequent thereon.


 




    	 	17	 



    	 



    

 


(c)
Interest Rate Upon Event of Default. Commencing on the occurrence of any Event of Default and until such Event of Default
is cured, this Note shall accrue interest at an interest rate equal to the Default Interest Rate.


 


(d)
Conversion Price Upon Event of Default. Commencing on the occurrence of any Event of Default and until such Event of Default
is cured, this Note shall be convertible at the Default Conversion Price.


 


(e)
Confession of Judgment. In addition to, and not in limitation of, the Holder’s other remedies under applicable law,
including as provided herein, upon an Event of Default, the Holder shall file with the appropriate court of law the Affidavit
of Confession of Judgment executed by the Company in connection with issuance of the Note, in the form attached as Exhibit
A hereto.


 


Section
8. Miscellaneous.


 


(a)
No Rights as Stockholder Until Conversion. This Note does not entitle the Holder to any voting rights, dividends or other
rights as a stockholder of the Company prior to the conversion hereof other than as explicitly set forth in Section 5.


 


(b)
Notices. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing,
and shall be sufficiently given if delivered to the addressees in person, by Federal Express or similar receipted next business
day delivery, as follows:


 


	 	If
    to the Company: 	OncBioMune
    Pharmaceuticals, Inc.
	 	 	11441
    Industriplex Blvd, Suite 190
	 	 	Baton
    Rouge, LA 70809
	 	 	Attention:
    Chief Executive Officer


 


	with
    a copy to: 	 	 
	(which
    shall not	 	 
	Constitute
    notice)	 	 


 


	 	 	K&L
Gates LLP
	 	 	Southeast
    Financial Center
	 	 	200
    S. Biscayne Boulevard, Suite 3900
	 	 	Miami,
    FL 33131
	 	 	Parker,
Clayton
	 	 	 
	 	If
    to Holder:	Cavalry
    Fund I LP
	 	 	61
Kinderkamack Road
	 	 	Woodcliff
Lake, NJ 07677
	 	 	Attention:
Thomas Walsh


 


or
to such other address as any of them, by notice to the other may designate from time to time. Time shall be counted to, or from,
as the case may be, the date of delivery.


 




    	 	18	 



    	 



    

 


(c)
Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest and late
fees, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a
direct debt obligation of the Company. This Note ranks pari passu with all other Notes now or hereafter issued under the
Purchase Agreement.


 


(d)
Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen
or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt
of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.


 


(e)
Exclusive Jurisdiction; Governing Law. All questions concerning the construction, validity, enforcement and interpretation
of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation,
enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party
hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall only be commenced in the state
and federal courts sitting in New York County, New York (the “New York Courts”). Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Note or the transactions contemplated hereby.


 


(f)
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the
Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this
Note on any other occasion. Any waiver by the Company or the Holder must be in writing.


 


(g)
Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain
in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all
other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates
the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the
maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal
of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect
the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such
law has been enacted.


 




    	 	19	 



    	 



    

 


(h)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall
be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law
or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company
covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein.
Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation
of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach would be inadequate. The Company therefore agrees
that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies,
to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and
without any bond or other security being required. The Company shall provide all information and documentation to the Holder that
is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this
Note.


 


(i)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day.


 


(j)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be
deemed to limit or affect any of the provisions hereof.


 


(Signature
Pages Follow)


 




    	 	20	 



    	 



    

 


IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above
indicated.


 


	 	OncBioMune Pharmaceuticals, Inc.
	 	 	                                   
	 	By:	/s/
    Jonathan F. Head
	 	 	Name:
Jonathan F. Head
	 	 	Title:
Chief Executive Officer


 




    	 	21	 



    	 



    

 


ANNEX
A


NOTICE
OF CONVERSION


 


The
undersigned hereby elects to convert principal under the 10% Senior Convertible Note due May 24, 2019 of OncBioMune Pharmaceuticals,
Inc., a Nevada corporation (the “Company”), into shares of common stock (the “Common Stock”), of the Company
according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged
to the holder for any conversion, except for such transfer taxes, if any.


 


By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the
Exchange Act.


 


The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock.


 


Conversion
calculations:


Date
to Effect Conversion:


 


Principal
Amount of Note to be Converted:


 


Payment
of Interest in Common Stock __ yes __ no


If
yes, $_____ of Interest Accrued on Account of Conversion at Issue.


 


Number
of shares of Common Stock to be issued:


Signature:


 


Name:


 


DWAC
Instructions:


 


Broker
No: __________________


Account
No: _________________


 




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